According to people familiar with the matter, Amazon is planning to sell NVIDIA's high-end chips, valued at approximately $8 billion, to external investors through a newly established special vehicle in order to optimize its balance sheet.
In recent weeks, the company has been in talks with investors to assess the market's interest in this transaction. According to the plan, Amazon will separate thousands of Grace Blackwell (Grace Blackwell) chips deployed in data centers across the United States and transfer them to a special purpose vehicle (SPV).
Subsequently, Amazon will rent back these high-end artificial intelligence chips from the special purpose vehicle, which will introduce external investors by issuing bonds. By transferring this batch of high-value semiconductor assets to investors, Amazon can shift to a more asset-light operating model on its balance sheet.
Amazon refused to comment on this matter.
Tech giants are seeking innovative ways to finance their massive investments in data center infrastructure, and the proposed action is introduced against this backdrop. A large portion of the cost for such infrastructure comes from the chips used to train advanced artificial intelligence models.
Tech companies are adopting various methods to move debt off their balance sheets in order to maintain their credit ratings. They provide residual value guarantees, promising lenders the future value of chips or data centers, rather than directly borrowing to finance projects. This approach conceals the actual scale of risk that tech giants are undertaking.
Investors expect that, relying on Amazon's current double-A rating, this instrument is likely to obtain an investment-grade credit rating, thereby attracting a wider range of investors such as insurance companies and pension funds to participate in the transactions.
Informed sources added that Amazon also plans to sell up to 10% of the equity in this entity, which means Amazon will no longer hold any shares in it. Negotiations between Amazon and investors are still ongoing, and there is a possibility of changes to the plan.
Insiders stated that the chips involved in this transaction were purchased or leased by Amazon and have been deployed in more than a dozen data centers across five states in the United States, including Nevada and Virginia.
NVIDIA's Grace Blackwell chip is one of the company's most advanced products, but it will soon be replaced by the newer Vera Rubin chip.
Leading artificial intelligence laboratories such as OpenAI and Anthropic (for which Amazon has committed to investing up to $83 billion) use the latest generation of chips to train models; the previous generation of chips continues to be used for business application operations. According to regulatory documents, Amazon expects each generation of semiconductor products to last at least five years.
Amazon's capital expenditures this year are expected to reach $220 billion, with the vast majority of that amount to be invested in its cloud business AWS, for the purchase of high-end chips and the expansion of artificial intelligence data centers.
Amazon has raised funds through the capital market to support this investment. In March of this year, the company announced plans to issue approximately $50 billion in corporate bonds; due to strong market demand, the fundraising amount was increased from the originally planned $37 billion. However, when issuing $25 billion in bonds in July, the demand for long-term bonds weakened, and investors demanded higher yields.
The financing model that uses graphics processors as collateral is very popular among companies like CoreWeave. Such enterprises obtain loans and financing by leveraging their stable chip procurement capabilities.
To help customers reduce borrowing costs, NVIDIA joined forces with major Wall Street institutions in August to establish a $500 billion financing platform, pledging to provide backing for up to $12.5 billion of such debt.
